Every jerk with an opinion and a forum account has responded to Nintendo's recent bad news by gracing the rest of the world with their brilliant amateur-hour financial advice. And far be it from us to consider ourselves above the fracas! We can be jerks, too!
Nintendo has revised its earnings forecast for fiscal year 2013 downward to the tune of one billion -- that's "billion," with a B -- American dollars. That is a catastrophic failure. Nevertheless, the current CEO of Nintendo, Satoru Iwata, has stated he has no intention of resigning and reportedly plans to mollify his shareholders by dipping into the company's war chest to make sure every Nintendo investor walks away from the current fiscal year with a little money in their pocket, despite the loss. So despite the gruesome numbers, things seem stable for Nintendo, business-wise... at least for the immediate future, anyway. But even a company with as much cash tucked under its mattress as Nintendo can't carry on like this forever. So here is how we at USgamer, whose business and financial expertise consists entirely of "playing a lot of video games," would save Nintendo.
Jeremy Parish: Nintendo should go third-party!
...is what boring people say. No, forget that nonsense. Never mind the fact that I don't want to see the last of the old guard retreat from hardware simply for the satisfaction of my own nostalgia; Nintendo's games excel because the company can afford to make its own rules. It designs hardware for its own needs, builds a business model to promotes its first-class first-party content at the expense of all else. I'd like to see Nintendo continue to make its own quirky hardware and top-flight software, but I also want them to realize that they need to tilt the playing field in favor of third parties, too. A quarter-century after publishers jumped ship from NES to Genesis in droves in pursuit of a bigger slice of a pie, Nintendo still doesn't seem to get the importance of third-party material. And yes, Nintendo's internal brands are premium material, but even the shiniest star can grow tarnished from overexposure.
I'd like to see Nintendo make some back room maneuvers in the west they way they have in Japan, where they've locked down pretty much every franchise of note save for hardcore otaku-bait. Western publishers aren't going to lock themselves into exclusive deals with Nintendo, but Nintendo could definitely make a more sincere effort to appeal to them.
This is a long-term venture I'm talking about here, one that involves abandoning the Wii U with as much haste as they can muster. Maybe announce a replacement next year at E3 -- but continue supporting the Wii U until the replacement arrives. The last thing they want to do is make the mistake Sega made when it came time to phase out Saturn; that one-year gap between Saturn and Dreamcast didn't do any favors to Sega's market share. Keep Wii U going, but build a smarter, friendlier, more clearly useful machine… and take a page from Sony's book by making developers heavily involved in the console's design.
Nintendo has been here before, during the GameCube era, and they have the money to keep the business afloat until they can kick off a new system. And much as with the DS in 2004, Wii U's replacement would be a rise to heaven/sink to hell proposition. If that sinks to hell, well, then it's probably time to cash in the chips. But I want to think Nintendo can still make it on its own terms, if only because of what it means for the games industry at large if it can.
Mike Williams: Nintendo's problem is they can't burn the Wii U off quickly. That would erode confidence in future Nintendo hardware, much like Sega's 32X euthanasia negatively affected their brand. They have to keep supporting the Wii U; at the very least they need to take this time to overcome any organizational deficiencies stemming from developing HD games or robust online ecosystems. They can't win with the Wii U, but they can definitely learn from it. If there's a replacement, I could see it coming in 2016: Announced at E3 that year and out by the holiday shopping season.
The Wii U's issue was one I stated repeatedly leading up to the console's launch: They had no clear, deep audience. There was no guarantee that the "blue ocean" audience of the Wii was coming back for a second round. Mainstream consumers who were more interested in gaming probably already owned a PlayStation 3 or Xbox 360, so even multi-platform games at parity (like Assassin's Creed III) had an uphill battle. Why pay for a new system and AC III, when it only looks marginally better than the version you can purchase on the console you already own? And ‘core' gamers were already on PC or waiting for the Xbox One or PlayStation 4, both of which were mostly rumors when the Wii U launched. That leaves Nintendo fans, which isn't a big enough market to keep a system competitive, especially since they can get a fix on 3DS.
The Wii U is just there in this odd grey area between markets, floating on driftwood and hoping someone will rescue it. So how do we save it?
I'd probably cut to a GamePad-less Wii U for starters. Get that price down. And I'd think long and hard about letting the Western arm of the company find some more autonomy. Let Retro and Next Level work on some of their own properties; with digital it becomes much easier to experiment with smaller titles. Start actively courting US and European developers, not for the Wii U, but for the next console. And listen to them. If they say what they want out of a Nintendo box is more power and a better online system, do it. Take that war chest and hire some great people to make it happen.
Cassandra Khaw: You know what'd really rock? Better selection of games for those outside of the United States, Europe and Japan. Take Malaysia, for example. The Nintendo eShop is absolutely barren here. I'm forced to jump hoops if I want to download anything. It's exasperating and, more often than not, I tend to find myself sidetracked by more immediate gratification because I can purchase a new game. Let's make something clear: I'm not angling for a crusade against region-locking here. I'm not a big fan but I understand it's sometimes a necessary evil due to licensing, publishing deals and so on. But a touch more support for the red-headed stepchildren of the gaming world would probably go down swimmingly.
On a more realistic note, I'd love to see, just, love for the Nintendo eShop. I get told repeatedly that it contains gems but the curse of shovelware hangs thickly around its third-party products. The other big names like Sony, Microsoft and even Valve (are they officially part of the console wars yet?) have done amazingly well by promoting their indie developers. And Nintendo could probably benefit from following their example. More curation! More active interest in cultivating commendable third-party parties like the guys behind Steamworld Dig and Swords & Soldiers! More guarantee that my casual browsing of the Nintendo eShop won't end in disappointment. It's way better than it used to be, but the eShop is still in drastic need of improvement.
Jaz Rignall: I'm with Mike on the GamePad-less Wii U. There are a few reasons why Wii U isn't selling. One is price, and the other is that people just don't get it. There's also a software issue -- but we can get to that later. The former two things can be fixed with a Wii U "Classic" console. It's a Wii U without that expensive screen. Use those nice Wii U pro controllers to clearly articulate the message that Wii U is a plain old-fashioned console everyone can understand, and throw it out the door for $129.99 - or however cheaply it can be made.
"I'd think long and hard about letting the Western arm of the company find some more autonomy. Let Retro and Next Level work on some of their own properties."
Jeremy: Yeah, I was once pretty averse to the idea of a pad-less Wii U, but better to admit defeat with a small hardware gimmick than with the larger business. Stubborn pride has to bow out sooner or later, and I would say "white-knuckle survival" marks that particular turning point.
That being said, I want to rescind my previous comments. All of that stuff I wrote above was also boring and predictable. I've decided what I want Nintendo to do is embrace its heritage. Like, it's really, really old-school heritage. Before the company was a video game maker, it was… well, it was a little bit of everything. It made toys, it made licensed goods, it made instant ramen, it maintained a chain of euphemistically named "love hotels" -- you name it. Nintendo found its golden goose when it discovered video games, but maybe the company needs to diversify. Get into selling real estate. Publishing books. Cosmetics. I don't know, something else. Find some way to make a steady living doing something other than video games. Then it can afford to peddle unprofitable hardware all it likes -- the Wii U as a fun vanity side project!
Mike: So you're saying that Nintendo should go the same route as Rovio, a company that recently mentioned that more than half of its employees aren't even developers at this point? Instead of chasing more games, Rovio is strongly concerned with getting the games it does has out there. On shirts, posters, lunch boxes, movies, and television shows. It's a very Disney way of doing things.
And the thing is, Nintendo used to do this. Captain N, the Super Mario Bros Super Show, the hideous Super Mario Bros movie. Why are they letting Rovio suck up the mindshare of today's kids? I talked about letting Nintendo devs play a bit more. Remember the SNES era? Stunt Race FX, Uniracers, Ken Griffey Jr. Baseball, and even Donkey Kong Country are all great games that came from the Western side of Nintendo. Why aren't they letting those developers have a longer leash?
Nintendo has to pull itself in two directions. It has to go back to its roots and embrace its more experimental side, but it also needs to get with the times when it comes to things like online infrastructure and outside merchandising.
Jaz: One of Wii U's biggest stigmas is its name. It isn't alluring -- and it certainly confuses many consumers, who just think it's some kind of tablet add-on that they don't need. If a GamePad-less Wii U was released, rebrand it as something like Nintendo Entertainment System Online and I'm sure consumers would pay attention. It'll leverage fond memories while also getting across the message that it's a new system. Oh, and open up the damn door so that more developers can leverage their old back catalog on virtual console, and make it even easier for indie developers to make games for the system.
Another thing I believe Nintendo needs to do is improve its online presence and eShopping experience. I'm going a little off-topic since this is supposed to be about Wii U -- but if we're talking about ideas to help Nintendo improve its lot, I do think making the experience of finding and buying Nintendo games easy and fun should be part of that. Right now, the eShop just isn't particularly helpful or usable, which mystifies me considering how much is at stake here.
A better shopping experience combined with the expanded virtual console and indie program I talked about above, and you'd at least have a baseline system that would have the potential to effectively compete with the likes of Sony's upcoming PlayStation Now service. Layer an affordable and fun "classic" Nintendo console on top of that, and you have something that's a clear alternative to the two expensive consoles that are currently kicking ass. Indeed, if it's priced right, thanks to Nintendo's always-phenomenal first-party games, it could very well become the "second system" everyone would want -- whether you own a PS4 or an Xbox One.